The aim of the Regulation and its underlying policy is to improve the energy efficiency of the worst performing private rented sector housing, to help reduce energy consumption and the emission of greenhouse gases. It follows extensive consultation on the issue during 2017 and 2018 and formed part of the content of the Energy Efficient Scotland Route Map launched in May 2018.

Energy use in our homes accounts for around a quarter of Scotland’s total energy consumption, and this policy will make a contribution to reducing carbon emissions by 42% by 2020 and 80% by 2050 in line with the requirements set out in the Climate Change (Scotland) Act 2009.

The Regulation and its underlying policy also aims to ensure that tenants in the private rented sector have access to good quality energy efficient homes and recognises that landlords must be able to continue to maintain and expand the sector.

The new Standard will contribute to the Scottish Government’s Greener and Healthier Strategic Objectives. It will impact on the following National Outcomes:

We live in well-designed sustainable places where we are able to access the amenities and services we need.

We reduce the local and global environmental impact of our consumption and productions.

Who will it affect?

Minimum standards for energy efficiency in homes in the private rented sector (PRS) will affect landlords and tenants. The minimum standards should make the least energy efficient homes in the PRS warmer and more comfortable, and are likely to reduce fuel bills and contribute to reducing fuel poverty. Owners will be responsible for making improvements required to meet the minimum standard for energy efficiency.

In 2017, 95,000 Scottish households in private rented accommodation (or 28% of PRS households)[1] were fuel poor[2], where they would be required to spend more than 10% of their income on fuel to maintain a satisfactory heating regime.

Overall, in the general population, 39% of one or two member households with at least one resident aged 65 or above are fuel poor, compared with 12% of families, and 21% of other households. 31% of households where one or more person is long-term sick or disabled (LTSD) are fuel poor compared with 20% of households with no one who is LTSD[3].

What might prevent the desired outcomes being achieved?

Achieving the desired outcome will be dependent on private landlords taking action to ensure compliance with the new standard. Property owners need to understand the requirements of the Regulations and also the support which is available to achieve the standard. In the event that the desired outcome is not achieved, property owners must also understand the implications of that. In the consultation associated with the draft regulations we are therefore seeking views on:

The use of exemptions to clarify those properties which may not be covered by the Regulations and how property owners may go about confirming an exemption for their property with the relevant local authority;

The support available to achieve the desired outcome including financial and advice;

The use of penalties in the event of non-compliance with the Regulation and the levels of those penalties based on a scale to a maximum fine of £5000.

Stage 1: Framing

Results of framing exercise

The purpose of the Regulation and associated guidance is to introduce regulations to improve energy efficiency in the worst performing private rented housing to reduce emissions and help tackle fuel poverty. We will look at evidence gathered under the following headings: age, disability, gender, gender identity/transgender people, sexual orientation, gender reassignment, race, religion and belief. Where there are gaps in evidence we will use the consultation period to look for evidence to fill these gaps.

Evidence for this paper is drawn from the Scottish House Condition Survey (SHCS) module of the Scottish Household Survey (SHS) collected in the period 2015-2017 and, where insufficient information is available from this source, from the 2011 census.

The statistics referred to in this paper may relate to the characteristics of the highest income householder (hereafter, ’the householder’) – e.g. the evidence given in relation to age and gender - or to the characteristics of any of the members within the household – e.g. the evidence provided under the disability heading.

The term “private rented sector” (PRS) is used to describe any tenure where the occupant does not own the dwelling and the landlord is not a local authority or registered social landlord (RSL). The policy will affect the occupants and owners (landlords) of low energy efficiency dwellings in privately rented properties which are covered by the repairing standard.

Energy efficiency is defined using the Energy Performance Certificate Energy Efficiency Rating Band A- Band G, where G is the least efficient and A is the most efficient, and is based on the 2012 Standard Assessment Procedure (SAP) methodology. Energy efficiency ratings are available from the SHCS on a SAP 2012 basis for the latest three reporting years (2015,2016 and 2017).

The proposals would affect those properties with an EPC below Band E between 1st April 2020 and 2022; or below Band D between 2022 and 2025 (as the standard will be increased over time). Any decision to raise the standard after 2025 would be taken in the context of the contribution of minimum standards to the Climate Change Plan and the development of a new long term strategy for tackling fuel poverty.

This paper presents evidence on both options, as summarised in the table in the Annex. Results for the regulation to Band E are more tentative, as they are based on a relatively small sample (111 cases, compared to 311 cases for the regulation to Band D, and 1,072 in the PRS as a whole); this makes it difficult to draw conclusive evidence from the analysis in this paper about the differences between the policy options in terms of their equality impact.

We have gathered some initial evidence for each of the equality groups as outlined above. It will be considered together with additional evidence resulting from consultation responses which will in turn inform the development of the policy

Extent/level of EQIA required

From the evidence we have gathered, we do not think that any households with people that have protected characteristics will be disproportionately affected by the proposed energy efficiency standards compared to households as a whole.

Retrofit works may in some instances lead to disruption in homes and some equality groups may be more vulnerable during these times. However, by allowing a reasonable lead-in time for changes, landlords will be able to plan any major works between tenancies, or other convenient times, and in the longer term, the benefits to all tenants should outweigh any temporary inconvenience. We do not anticipate the scale of work would be sufficient to require households to move out while work is being done but we will invite equality group representatives to comment and submit evidence in relation to those protected characteristic groups they represent.

We will consider this along with any additional evidence gathered during the consultation period for these draft Regulations and guidance.

Stage 2: Data and evidence gathering, involvement and consultation

Include here the results of your evidence gathering (including framing exercise), including qualitative and quantitative data and the source of that information, whether national statistics, surveys or consultations with relevant equality groups.

The age of the highest income householder is closely related to their tenure. Compared with the age distribution of Scottish householders, those in the private rented sector have a younger age profile;

around half (47%, or 159,000 households) of PRS highest income householders are under 35 compared to 16% (395,000 households) of all Scottish householders

around 12% (41,000) are aged 65+ compared to 31% (760,000) in Scotland as a whole.

As such, 40% (159,000) of households headed by a householder under 35 are in the PRS. Of these, 5% (8,000) are affected by regulation to Band E, and 20% (31,000) are affected by regulation to Band D. As a result, 35% of those affected by regulating to a minimum standard of Band D are headed by householders under 35, which is less than the proportion in the PRS as a whole.

Furthermore, the proportion of Band E households in the PRS headed by a householder under 35 is also lower than in the PRS as a whole, as householders under 35 are less common in homes that are rated Band F or Band G in the PRS (27% in this group compared to 47% in the PRS overall).

In contrast, 5% (41,000) of householders headed by householder over 65 live in the PRS. Of these, 17% (7,000) are affected by regulation to Band E, and 36% (15,000) are affected by regulation to Band D.

Therefore, 17% (15,000) of all PRS households affected by moving to a minimum standard of Band D are headed by householders aged 65 or older (similar to the proportion of households headed by over 65 year olds in the PRS as a whole) and around 24% of those affected by moving to a minimum standard of Band E (higher than the proportion in the PRS as a whole) are headed by householders aged 65 or older.

For the PRS as a whole, 9% of households are affected by regulation to Band E, and 26% to Band D.

Therefore, while fewer older households live in the PRS compared to younger households, proportionally more will be affected by the regulations to Band E and Band D than younger households, as older

households are more likely to live in less energy efficient PRS properties. However, due to the younger profile of the PRS as a whole, more younger households will be affected overall.

The incidence of families in the regulated properties is also similar to the private rented sector as a whole and to Scotland. Almost quarter of low energy efficiency dwellings in the PRS are occupied by households with at least one child aged under 16 (22% of PRS dwellings in current Bands E, F or G and 23% of PRS dwellings in current Bands F or G); the differences with the shares of families in the PRS as a whole (25%) and in Scotland (23%) are not statistically significant.

2015-2017 Scottish House Condition Survey

We do not think that there will be any adverse impacts from the policy because of a person’s age. While there is potential for disruption while work is carried out, the tenant will benefit from having a warmer home, and this may particularly benefit vulnerable older residents and children by improving their warmth and reducing their risks of respiratory diseases, etc, which can be linked to poor energy efficiency.

We will encourage groups that represent different age groups to respond to the consultation.

Around 44% of households (equivalent to 1,068,000 households) in Scotland in 2015-2017 reported at least one person who is long-term sick or disabled (LTSD). This figure covers all household members, including children. Around 10% (107,000) of LTSD households live in the PRS – consequently 32% of the PRS overall report a household member having some long-standing health problem, lower than the rate in Scotland overall.

The LTSD rates for the groups affected by the minimum Band E or Band D standard are both 38%. The differences with the private rented sector as a whole (32%) are not statistically significant.

Therefore there is no evidence to suggest that PRS households where one or more person suffers a long-standing health problem or disability would be disproportionately affected by regulation to improve energy efficiency in the PRS. However, because households with LTSD are less likely to live in private rented accommodation, they are less likely to be affected by the policy proposal.

2015-2017 Scottish House Condition Survey

We do not think that there will be any adverse impacts from the policy because of a person’s disability. While there is potential for disruption while work is carried out, the tenant will benefit from having a warmer home, and this may particularly benefit tenants with a disability by improving their warmth and reducing their risks of respiratory diseases, etc, which can be linked to poor energy efficiency.

There is no evidence to suggest that, overall, a minimum energy efficiency standard would disproportionately affect people with a disability.

We would welcome responses to the consultation on whether the proposed regulations would have any disproportionate effects on people because of their disability.

Sex

14% of households which are female-headed live in the PRS, equivalent to 141,000 households. Of these households, 25% (33,000) live in low energy efficient PRS dwellings (Bands E,F or G). As a result, two-fifths of all low energy efficient dwellings in the PRS are occupied by households which are female-headed; 40% (35,000 households) of PRS dwellings in current Bands E, F or G and 39% (11,000 households) of those currently rated Band F or Band G. The differences with the share of householders in the PRS as a whole (42%) and in Scotland (41%) which are headed by a female householder are not statistically significant.

The incidence of families in the regulated groups is also similar to the private rented sector as a whole and to Scotland, where around a quarter of households contain at least one child aged under 16.

There is therefore no evidence that female-headed households in the PRS or households with children in the PRS may be more likely to be affected by a minimum Band E or Band D standard than other households.

2015-2017 Scottish House Condition Survey

We think that there will be positive impacts on any tenant living in a home affected by the proposals as homes will be warmer and easier to heat.

There is no evidence to suggest that, overall, a minimum energy efficiency standard would disproportionately affect either sex. We would welcome responses on whether the proposed regulations would have any disproportionate effects on people because of their gender.

Pregnancy and Maternity

There is no information in either the SHCS or the Census relating to pregnancy

We think that there will be positive impacts on any tenant living in a home affected by the proposals as homes will be warmer and easier to heat.

As there is no information from either the SHCS or the Census relating to pregnancy and maternity we would welcome responses on whether the proposed regulations would have any disproportionate effects on people because of pregnancy and maternity.

Gender Reassignment

There is limited information on housing tenure for transgender people. This information was not collected in the census or the SHCS, and housing providers do not routinely gather such data.

A Scottish Transgender Alliance survey in 2012 reported that 11% of 526 respondents rented privately as a joint tenant and 9% rented privately as a single tenant.

We think that there will be positive impacts on any tenant living in a home affected by the proposals as homes will be warmer and easier to heat.

We do not know of any reason that minimum standards for energy efficiency would disproportionately affect people in this category. As there is limited information on housing tenure for transgender people we would welcome any comments from individuals and representative groups and encourage them to respond to the consultation.

Sexual Orientation

There is limited information on housing tenure for sexual orientation. This information was not collected in the census or the SHCS, and housing providers do not routinely gather such data.

We think that there will be positive impacts on any tenant living in a home affected by the proposals as homes will be warmer and easier to heat.

We do not know of any reason that minimum standards for energy efficiency would disproportionately affect people because of their sexual orientation. As there is limited information on housing tenure and sexual orientation we would welcome any comments from individuals and representative groups such as Stonewall.

Race

On census day 2011 there were approximately 200,000 Black, Asian and Minority Ethnic (BAME) people in Scotland, making up just over 4% of the population. However they make up around 10% of the population living in the private rented sector.

The SHCS sample is not sufficiently large to allow a breakdown of the regulated groups by ethnicity and to analyse the equality impact of the proposed regulations on ethnic minorities, even with three years of data combined.

However, data available from the Census indicates that BAME communities are largely concentrated in urban locations. The SHCS estimates private rented sector dwellings in urban areas have a higher (i.e. better) energy efficiency profile (4% of PRS urban dwellings were in Bands F or G in 2015-2017 compared to 33% of PRS rural dwellings), therefore fewer of these dwellings are likely to be required to take action under these regulations.

There is therefore no strong evidence that BAME populations would be adversely affected by the policy options.

2011 Census

We think that there will be positive impacts on any tenant living in a home affected by the proposals as homes will be warmer and easier to heat.

We do not know of any reason that minimum standards for energy efficiency would disproportionately affect people due to their race. However we would welcome any comments from individuals and representative groups such as Council of Ethnic Minority Voluntary Sector Organisations (CEMVO), Poverty Alliance.

Religion or Belief

According to the 2011 Census, in Scotland, 56% of the population report having a religion: 54% report as being Christian, 1.4% as being Muslim. Minority religion groups (Buddhist, Hindu, Jewish, Muslim, Sikh) tend to be concentrated in Glasgow and Edinburgh.

Information relating to the housing of those with religious beliefs is limited. The Census provides the religion of people aged 16+ broken down by tenure. This shows a similar proportion of people with no religion in the PRS (36%) compared to Scotland as a whole (34%) . The proportion of private tenants with minority religious beliefs (Muslim 1%, Hindu 0.1% and Buddhist 0.2%) is also similar to the Scotland as a whole.

Due to sample size constraints, it is not possible to analyse affected households by religious belief using the SHCS, even when three years of data are merged, however Census data indicates that minority religions are largely concentrated in urban areas, where fewer private rented sector dwellings are likely to be required to take action under these regulations: 33% (18,000 dwellings) of rural PRS dwellings are rated in EPC Bands F or G, compared to 4% of urban dwellings (11,000 dwellings).

There is therefore no strong evidence that populations of minority religions would be adversely affected by the policy options.

2011 Census (Table KS209SCb and AT_124_2011)

We think that there will be positive impacts on any tenant living in a home affected by the proposals as homes will be warmer and easier to heat.

We do not know of any reason that minimum standards for energy efficiency would disproportionately affect people due to their religion and belief. However we would welcome any comments from individuals and representative groups.

Marriage and Civil Partnership

(the Scottish Government does not require assessment against this protected characteristic unless the policy or practice relates to work, for example HR policies and practices - refer to Definitions of Protected Characteristics document for details)

This policy does not relate to work therefore we have not considered it for this EQIA.

Having considered the data and evidence you have gathered, this section requires you to consider the potential impacts – negative and positive – that your policy might have on each of the protected characteristics. It is important to remember the duty is also a positive one – that we must explore whether the policy offers the opportunity to promote equality and/or foster good relations.

Do you think that the policy impacts on people because of their age?

Age

Positive

Negative

None

Reasons for your decision

Eliminating unlawful discrimination, harassment and victimisation

X

We do not think that there will be any adverse impacts from the policy because of a person’s age.

Advancing equality of opportunity

X

We think that there will be positive impacts as homes will be warmer and easier to heat. The tenant will benefit from having a warmer home, and this may particularly benefit older tenants and families with young children, by improving their warmth and reducing their risks of respiratory diseases, etc, which can be linked to poor energy efficiency.

Promoting good relations among and between different age groups

X

We do not think that our proposals will have any impact on good relations among and between different age groups.

Do you think that the policy impacts disabled people?

Disability

Positive

Negative

None

Reasons for your decision

Eliminating unlawful discrimination, harassment and victimisation

X

There is no evidence to suggest that, overall, a minimum energy efficiency standard would disproportionately affect people with a disability.

We would welcome responses on whether the proposed regulations would have any disproportionate effects on people because of their disability.

Advancing equality of opportunity

X

We think that there will be positive impacts as homes will be warmer and easier to heat. The tenant will benefit from having a warmer home, and this may particularly benefit tenants with a disability by improving their warmth and reducing their risks of respiratory diseases, etc, which can be linked to poor energy efficiency.

Promoting good relations among and between disabled and non-disabled people

X

We do not think that our proposals will have any impact on good relations among and between disabled and non – disabled people.

Do you think that the policy impacts on men and women in different ways?

Sex

Positive

Negative

None

Reasons for your decision

Eliminating unlawful discrimination

X

There is no evidence to suggest that, overall, a minimum energy efficiency standard would disproportionately affect either sex.

We would welcome responses on whether the proposed regulations would have any disproportionate effects on people because of their gender.

Advancing equality of opportunity

X

We think that there will be positive impacts as homes will be warmer and easier to heat.

Promoting good relations between men and women

X

We do not think that our proposals will have any effect on good relations between men and women.

Do you think that the policy impacts on women because of pregnancy and maternity?

Pregnancy and Maternity

Positive

Negative

None

Reasons for your decision

Eliminating unlawful discrimination

X

There is no information in either the SHCS or the Census relating to pregnancy and maternity. We do not anticipate that a minimum energy efficiency impact would have particular impacts on this group but would welcome consultation responses from individuals or representative groups that would give us more information.

Advancing equality of opportunity

X

We think that there will be positive impacts as homes will be warmer and easier to heat.

Promoting good relations

X

We do not think that our proposals will have any impact on good relations due to pregnancy and maternity.

Do you think your policy impacts on transsexual people?

Gender reassignment

Positive

Negative

None

Reasons for your decision

Eliminating unlawful discrimination

X

We do not know of any reason that minimum standards for energy efficiency would affect transsexual people . However we would welcome any comments from individuals and representative groups.

Advancing equality of opportunity

X

We think that there will be positive impacts as homes will be warmer and easier to heat.

Promoting good relations

X

We do not think that our proposals will have any impact on promoting good relations with transsexual people.

Do you think that the policy impacts on people because of their sexual orientation?

Sexual orientation

Positive

Negative

None

Reasons for your decision

Eliminating unlawful discrimination

X

We do not know of any reason that minimum standards for energy efficiency would disproportionately affect people due to their sexual orientation. However we would welcome any comments from individuals and representative groups.

Advancing equality of opportunity

X

We think that there will be positive impacts as homes will be warmer and easier to heat.

Promoting good relations

X

We do not think that our proposals will have any impact on promoting good relations because of a person’s sexual orientation.

Do you think the policy impacts on people because of their religion or belief?

Religion or belief

Positive

Negative

None

Reasons for your decision

Eliminating unlawful discrimination

X

We do not know of any reason that minimum standards for energy efficiency would disproportionately affect people due to their religion and belief. However we would welcome any comments from individuals and representative groups.

Advancing equality of opportunity

X

We think that there will be positive impacts as homes will be warmer and easier to heat.

Promoting good relations

X

We do not think that our proposals will have any impact on promoting good relations among people because of their religious belief.

Do you think the policy impacts on people on the grounds of their race?

Race

Positive

Negative

None

Reasons for your decision

Eliminating unlawful discrimination

X

We do not know of any reason that minimum standards for energy efficiency would disproportionately affect people due to their race. However we would welcome any comments from individuals and representative groups.

Advancing equality of opportunity

X

We think that there will be positive impacts as homes will be warmer and easier to heat.

Promoting good race relations

X

We do not think that our proposals will have any impact on promoting good race relations.

Do you think the policy impacts on people because of their marriage or civil partnership?

Have positive or negative impacts been identified for any of the equality groups?

No negative impacts have been identified for any of the equality groups.

We have outlined positive and negative impacts of the policy across all regulated properties below.

Is the policy directly or indirectly discriminatory under the Equality Act 2010?

There is no evidence that the policy is directly or indirectly discriminatory under the Equality Act 2010.

If the policy is indirectly discriminatory, how is it justified under the relevant legislation?

If not justified, what mitigating action will be undertaken?

Describing how Equality Impact analysis has shaped the policy making process

The equality analysis has helped to highlight areas where we do not have enough evidence on people with protected characteristics to make an informed decision on the effect of the policy on them.

There have been no implications for costs or resources arising from the EQIA analysis.

Positive impacts from the introduction of minimum energy efficiency standards:

The measures installed to meet minimum standards are likely to make homes warmer and more comfortable and to reduce fuel bills and contribute to reducing fuel poverty. Warmer, easier to heat homes are likely to have a positive effect on the health of the occupiers of these houses.

The regulations will make a positive contribution to achieving the Scottish Government’s target to reduce CO2 emissions by 42% by 2020 and 80% by 2050.

There may be more jobs created to carry out the necessary work.

It is likely to increase awareness of energy efficiency among landlords and tenants.

It may contribute to making energy efficient homes more desirable.

Negative impacts from the introduction of minimum standards:

Tenants may experience some temporary disturbance while work is carried out. We would encourage landlords to carry out work while the property is void to minimise this.

Landlords may increase rents to recoup costs of improvements.

We think that regulations for minimum standards will help to improve the energy efficiency of the poorest performing housing in the private rented sector. The EQIA has looked at whether there would be any disproportionate effects on people with protected characteristics. At this stage we do not think that there will be. Where we do not have evidence to support this, we will seek further views in the consultation by encouraging representative groups to respond to the consultation. We will review the EQIA to take account of any responses to the consultation.

Monitoring and Review

We are proposing to monitor the impact of the introduction of these Regulations at the point of first backstop (2022).

We will also use existing channels where possible, for example the Scottish House Condition Survey and EPC register as well as feedback from local authorities. This will enable us to track the effect the minimum standard is having on the housing stock.

The Scottish Government will also monitor the contribution of minimum standards to the Climate Change Plan as part of the Energy Efficient Scotland Programme (EES).

We will use this information to review the implementation of the standard. Future changes to energy efficiency standards beyond those implemented would be taken in the context of this monitoring and review process, and within of the wider contribution of standards to the Climate Change Plan and the development of a new long term strategy for tackling fuel poverty.

Future changes to energy efficiency standards would be subject to a new EQIA.

Annex

Dwellings which are part of various protected groups as % of dwellings regulated under the two policy options, of the private rented sector (PRS) as a whole and of Scotland. Based on SHCS2015-2017.

PRS dwellings in current bands FG (affected by regulation to E)

PRS dwellings in current bands EFG (affected by regulation to D)

All PRS

All Scotland

Age

Householders aged under 35

27%

35.0%

47%

16%

Householders aged 65+

24%

17.0%

12%

31%

Long-Term Sick or Disabled (LTSD)

Households with one or more LTSD member

38%

38%

32%

44%

Gender, Maternity

Female householders

39%

40%

42%

41%

Households with one or more child (under 16)

23%

22%

25%

23%

Sample size (2014-2015)

111

311

1072

8606

Notes: analysis based on the Scottish House Condition Survey (SHCS)2015-2017.

Stage 5 - Authorisation of EQIA

Please confirm that:

This Equality Impact Assessment has informed the development of this policy:

Yes √

No

Opportunities to promote equality in respect of age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex and sexual orientation have been considered, i.e.:

Eliminating unlawful discrimination, harassment, victimisation;

Removing or minimising any barriers and/or disadvantages;

Taking steps which assist with promoting equality and meeting people’s different needs;

If the Marriage and Civil Partnership protected characteristic applies to this policy, the Equality Impact Assessment has also assessed against the duty to eliminate unlawful discrimination, harassment and victimisation in respect of this protected characteristic:

Yes

No

Not applicable √

Declaration

I am satisfied with the equality impact assessment that has been undertaken for Minimum energy efficiency standards in private rented housing and give my authorisation for the results of this assessment to be published on the Scottish Government’s website.